There is an old saying, "when one door closes, another opens." This blog entry is focused on showing that you can often squeeze lemonade from life’s lemons. What drove the security market prior to 9/15/08, is no longer driving the market. The industry has changed, and the sooner business managers, chief security officers, and others understand this change they will be able to respond to the new risks, and new opportunities that lie ahead.
The security industry is not immune from the broad economic consequence of the financial downturn. Indeed a deep freeze has been put on capital spending budgets of many non-mission critical or regulation-required private industry projects and some municipal and state security projects where bond based finance is required. Nobody knows when the economic thaw will occur as the climate is actually getting colder. However, just at the time when one thinks the economic climate cannot get any worse, like a coin, there is a flip side, as bad as the economy is right now, the same economic hardship conditions create opportunities that pop up like a coiled spring.
During this past week, I have observed many clients, and clients of my peers, facing the grim economic realities and they are now considering deep, deep, -- did I say deep – cuts in capital purchasing, personnel, and operations, and an essential consideration in making any such operational cut is to consider and manage the consequence of such actions. Wise business operators will insist on preparation of budget downsizing plans that thoughtful consider consequence management and unintended consequences of their restructuring actions; such plans may include vetting new Business Process Outsourcing (BPO) providers and developing risk mitigation for downside risks of disgruntled employees, workplace violence prevention, intellectual property retention, and executive protection. Additionally, there may be increased demand for security services on targets of crime opportunity by disgruntled employees, fearful employees, and others causing crime opportunity risk for many types of crimes and crime targets to become recently elevated.
What is the take away for security managers -- What I am trying to say is for security consultants, managers, CSOs, when your "cheese" gets moved, you find where the new cheese is located. You reassess your risks associated with the actions of moving to new ground, and you move forward proactively. Waiting for your legacy business client opportunities or projects to thaw may keep you from thinking about new business opportunities created by this challenging market.
There are other lessons to be learned from managing through difficult politico-economic shocks. Drawing from a few lessons learned from recessions and economic shocks of times past -- I recall the last time my security consulting business was impacted by a significant economic shock. It was the terrorism events of 9/11. Providentially, do to a situation beyond my control, I was unable to reach the WTC site on the morning of Tuesday September 11, 2001. On that day, I had a meeting scheduled with NYPD, NYCHA, architects and planners to review progress on plans for video surveillance systems that my firm had designed for a couple of the boroughs and associated police substations. My client was located in the World Trade Center, Building 10 and at another office on nearby Broadway. Fortunately, I was not onsite when the terrorism events occurred but it was a close call -- that’s a tale for another time. There was an important business life lesson that I learned from these events.
Large-scale economic shocks change everything in the short-run. There is no steady state, and when conditions calm, frequently they have changed forever. One of the lessons that I learned from living through this economic shock was the impact on business that occurred with the event. First, the public confidence in the financial markets and economy were badly damaged by 9/11, as people feared touring to New York City, and airlines, hotels, and business travel ground to a halt immediately, and then when it started up again it was heavily biased toward ground transportation. Second, I noted that all of my customers impacted by the economic shock of necessity at first, and later for convenience, suspended transfer payments of their accounts payable. Few of my customers paid their invoices in September 2001 (so having emergency capital was essential for operations) as the A/R grew to 60 days, normally being only 30 days. Third, some of my clients were directly impacted adversely by the politico-economic events and their pain became my pain -- e.g., NYC's focus was necessarily redirected to their pressing requirements of restoring the public trust, creating a safe city, and getting the city working again -- meaning my jobs out in the boroughs were immediately tabled as secondary concerns, as the city focus centered on the WTC site and market recovery, and my company invoices requesting payment from the city for work performed prior to 9/11 remained unpaid for two years. Fourth, I learned that there is no safety in a government contract following significant political-economic events. My firm had a 5-year contract with the federal government that included a 5-year extension, and this contract opportunity was swept away through Congressional fiat as the money was needed immediately elsewhere in a different Department, and we were left with a cadre of professionals without work authority, and significant painful employment cuts were necessary to address the realities of the new demand. The economic shocks had resulted in somebody moving our cheese.
There is an upside to this story however. With almost the same intensity that the work opportunity imploded with the negative economic shock, other new opportunities sprung up quickly. For instance, our firm saw a three-fold increase in the demand for security risk assessments immediately following 9/11. Further, we saw demand from new customers in new markets not formerly within our operating niche. Another upside from this disruptive economic shock was the requirement for nearly all operations to cut costs, get more efficient, and be responsive with fewer dollars. If you were a provider of disruptive technologies that enabled customers to do more with less, then you had a wonderful demand pull from the market for your services, and it was in this environment that we moved our ground (i.e., our targets of economic opportunity), and we focused on the provision of remote monitored services and automating routine activities that enabled the mantra of faster, better, cheaper.
So the sooner you realize that the world has forever changed since the economic shocks that started with the collapse of Lehman Brothers on 9/15/08, the stock market collapse, and the disruptive and painful economic events occuring since that date, the sooner you will be able to move to the new markets that are indeed popping up. When life hands you lemons, make lemonade!
Friday, November 14, 2008
Tuesday, November 11, 2008
General Economic Woes Impact Security Market Projects Negatively; Prepare for a long cold winter
Alas the economic woes of the financial crises starting 9/15/08 with the Lehman bankruptcy and other financial blues has now negatively impacted the security market. I frequently contact my peers inside and outside the industry to get a pulse on their niches in the security market. At ASIS Annual Seminar (Sept 08), there was concern particularly among the smaller vendors, but suppliers and large contractors exclaimed that they were not seeing any softening, and I thought this odd. Well, if they felt good in early September, by late October a near chorus of pain was being experienced by all within the industry.
The credit markets have severely impacted client availability of capital, and fear and unexpected economic climate has suspended all but essential or regulated business. This sentiment was expressed in Scott Goldfine's recent blog on ISC East where he wrote, "Although the attendance was reasonably robust, the atmosphere was largely one of trepidation with the prevailing discussions centering on slumping sales, the bleak economy and an unsure fiscal outlook. The vast majority of industry professionals, particularly on the supplier side or among the larger installation operators, are cutting back expenses wherever possible and hunkering down to weather a widespread downturn in business. Most are trying to remain optimistic, but the historically recession resistant electronic security industry is experiencing one of the most challenging periods ever." Note Scott is the Editor of Security Sales and Integration, an important and leading security industry sales and systems integration tracking publication.
In my own security consulting practice at Sikyur LLC, 2008 started out with a boom, with record sales and revenue for the first half-year, however from October onwards the only sounds heard were the screeching wheels grinding to a halt from the coming train wreck. How did this happen, well gradually, then suddenly. Here’s some advice on how to position yourself to survive the long cold winter, and a play by play of actions taken in my own business so that others might see the same trends in their own businesses, and take heed if they desire. Not everyone needs to step in a pot hole to know that it is there.
First, you have got to preserve capital and make liquid and accessible your assets and business lines going into this financial storm. It is unwise to count on business credit lines or credit cards to tide one over as banks are reducing lines unilaterally. Credit is no safe haven, cash is however. My advice is to put away or make accessible sufficient cash or financings to provide up to 9-12 months of free cash flow and capital to operate if no additional dime comes into your business for the next several quarters.
Second, beyond economic uncertainty is macro political economic policy uncertainty, and this may have greater impact on the markets. Prepare for change, study out likely market changes, and move your ground to let the market come to you (if you can). Consider for a moment what is happening in the world right now -- the US government is in flux, a new President and Congress comes to town in January, an historic Bretton Woods type meeting to be held later this week, a new US Treasury Secretary to be announced and financial team put in place, a change of guard for Congress and its committees, and tremendous jockeying for position in the new political climate -- all this while the world experiences a 100-year economic shock.
Third, be nimble, flexible, and be prepared to change your business plan if your "cheese" gets moved. What worked for 2008 Q1 and Q2 is not working now, so don't focus on what is not working, but instead re-invent, prepare for the new market opportunities, and the market will come to you. There is still plenty of security systems buying in regulated business such as utilities and energy, critical infrastructure including chemical and hazmat protection, and the classical businesses that do well in a recession environment. Further in this environment businesses that offer compelling cost savings such as recurring revenue models such as remote video monitoring, SaaS models for access control, building controls, and surveillance will do well.
Fourth, retool your skill sets in the quiet time. Typically when recessions hit, graduate schools become flooded with applications. While graduate school is certainly important and necessary for some fields, more focused certifications and specialized training will get you further along the career path. In the security profession there are several certifications that will leave you prepared for the new challenges. For those considering preparation for Chief Security Officer (CSO) in the future career, consider getting your CPP, CISSP, CFE or other project management certifications. If you have one, consider getting a second as in an competitive environment the highly skilled have the greatest opportunities provided to them.
Fifth, use your new found time to find ways to contribute to your family, church, or community in your skill set area. If I am correct about this economic downturn, we are about to witness a crime wave of great proportions not seen on this planet in decades. What will be a cold winter may thaw into a tremendous warm climate and tsunami of crime if economic misery becomes too great, if unemployment becomes too widespread, indeed if the rule of law is suspended by rational Robin Hoods that value eating more than rule abiding, and then there are those other hoods that just take advantage of the poor, the weak, and crime opportunity wherever it may be found. Your skills as a security professional will be highly sought after the cold season thaws.
So there is my advice. Now on background a little history of how I have come to these conclusions given the experience of the market and my own firm, Sikyur LLC, a security consulting firm that advises Chief Security Officers (CSOs) and their direct reports, other C-level executives and boards of directors.
# # #
Going into 2008 security consulting for Sikyur was excellent and times were good, very good, indeed I turned away work, and I had the luxury of choosing to be picky about what I worked on, and with whom. January, February, and March rolled in like a lion. Indeed, I made my year in the first four months.
However, in late April, I first noticed the economic wheels of the wagon coming off during the 3rd week of April 2008, when due to unexpectedly higher oil prices, one of my customers that runs a nationwide carrier service found that their marginal delivery costs rapidly outpaced their fee structure resulting in unexpected short-term losses -- and you guessed it, management responded quickly to eliminate all non-essential spending (including the remainder 2008-2009 security training and technical assistance) provided by my firm. One client experience while interesting does not make a trend, however it would not be long before another wheel came off the wagon.
In early May 2008, another security systems integration client, from a different industry, found their borrowing and bonding costs had greatly increased and they suspended indefinitely the remainder of the scheduled project starts for 2008 and 2009. There was some hope by management that new projects would be released for Q4 2008, however this public entity failed to raise capital in their tax-free bond financing market in September 2008, causing them to severely pull back on their spending gauge. By October 2008 they were closing all the hatches and preparing for a cold winter with little access to public finance as the bond investors are worried that the municipal authority bonds may default due to decreased housing prices, decreased tax collections, etc.
So what was a mere erosion of economic opportunity in May, turned to Black October where public funding for municipalities was in jeopardy, and clients are now concerned for their own self employment, and they have little time or interest in preserving their contract work in this environment. Now in mid November 2008, the majority of my pipeline projects scheduled for Q4 are frozen, or suspended indefinitely. Several projects that were already approved by line management, still await CFO and board approvals are languishing, and I do not expect these jobs to unfreeze until mid-Winter or Spring. There is still some economic activity, but it pales in comparison to last earlier periods.
So what is my outlook and response -- many years ago I was a young entrepreneur of a rapidly growing company and I was invited to visit the Kauffman Foundation in Kansas City to attend a forum for high-growth companies and entrepreneurs. During the multi-day meeting I had an opportunity to meet with peers and top executives from leading companies that took time to review our business plans and advise us personally. It happened that my two business advisors at the meeting were the Entrepreneurship program director and Foundation Chairman. What I learned has stayed with me to this day. The lesson was this -- every company, business, organization, family, individual -- will experience market cycles, and it is important that you act in good times to preserve capital to give yourself 9-12 months of free cash flow and capital access, so that when truly bad times hit you can ride them out. An example was then given by the Kauffman Executive Director, who was the former CFO of Kauffman Labs. He explained that Kauffman Labs was originally operated with very little debt, owning outright their buildings. Looking at their risk posture, the Kauffman CFO decided that the company needed better protection from downside risk and greater liquidity – so he convinced management to sell their corporate buildings and he leased the buildings back, placing 12-18 months of cash on their books. Sure enough, in a few seasons a recession hit, and damaged their operating market greatly, and because of their strong cash position, they were able to ride the storm out as few recessions last longer than 9-12 months. As fate would have it, a severe economic downturn did occur, they rode out the storm and with their cash they were able to purchase for pennies on the dollar their nearest competitor that was insufficiently capitalized during this period. What was my take away -- cash remains king, credit can contract (by banks at will), but cash and available capital can help you ride out nearly any storm. At the time, I had only 2-months of cash on hand in my operating business and the amount of cash they felt I needed was staggering. They were right, and I moved my ground, reorganized my basket of assets to have access to cash in the bank for time of need.
So today, while the market looks darkest as we are still in the storm, and it may get worse, I have the comfort of knowing that I am prepared and I have ready cash flow and capital to whether 12 months of bad economic cycle. Now I firmly believe that the security systems integration market will come back by the mid- Spring 2009 or early summer as either public spending, regulation, or crime opportunity will encourage reinvestment in security technologies. But for now, it looks like a long cold winter. So I am following my own advice related above, and looking forward to writing a book or two, and using my seasons Ski pass this winter. Cheers.
The credit markets have severely impacted client availability of capital, and fear and unexpected economic climate has suspended all but essential or regulated business. This sentiment was expressed in Scott Goldfine's recent blog on ISC East where he wrote, "Although the attendance was reasonably robust, the atmosphere was largely one of trepidation with the prevailing discussions centering on slumping sales, the bleak economy and an unsure fiscal outlook. The vast majority of industry professionals, particularly on the supplier side or among the larger installation operators, are cutting back expenses wherever possible and hunkering down to weather a widespread downturn in business. Most are trying to remain optimistic, but the historically recession resistant electronic security industry is experiencing one of the most challenging periods ever." Note Scott is the Editor of Security Sales and Integration, an important and leading security industry sales and systems integration tracking publication.
In my own security consulting practice at Sikyur LLC, 2008 started out with a boom, with record sales and revenue for the first half-year, however from October onwards the only sounds heard were the screeching wheels grinding to a halt from the coming train wreck. How did this happen, well gradually, then suddenly. Here’s some advice on how to position yourself to survive the long cold winter, and a play by play of actions taken in my own business so that others might see the same trends in their own businesses, and take heed if they desire. Not everyone needs to step in a pot hole to know that it is there.
First, you have got to preserve capital and make liquid and accessible your assets and business lines going into this financial storm. It is unwise to count on business credit lines or credit cards to tide one over as banks are reducing lines unilaterally. Credit is no safe haven, cash is however. My advice is to put away or make accessible sufficient cash or financings to provide up to 9-12 months of free cash flow and capital to operate if no additional dime comes into your business for the next several quarters.
Second, beyond economic uncertainty is macro political economic policy uncertainty, and this may have greater impact on the markets. Prepare for change, study out likely market changes, and move your ground to let the market come to you (if you can). Consider for a moment what is happening in the world right now -- the US government is in flux, a new President and Congress comes to town in January, an historic Bretton Woods type meeting to be held later this week, a new US Treasury Secretary to be announced and financial team put in place, a change of guard for Congress and its committees, and tremendous jockeying for position in the new political climate -- all this while the world experiences a 100-year economic shock.
Third, be nimble, flexible, and be prepared to change your business plan if your "cheese" gets moved. What worked for 2008 Q1 and Q2 is not working now, so don't focus on what is not working, but instead re-invent, prepare for the new market opportunities, and the market will come to you. There is still plenty of security systems buying in regulated business such as utilities and energy, critical infrastructure including chemical and hazmat protection, and the classical businesses that do well in a recession environment. Further in this environment businesses that offer compelling cost savings such as recurring revenue models such as remote video monitoring, SaaS models for access control, building controls, and surveillance will do well.
Fourth, retool your skill sets in the quiet time. Typically when recessions hit, graduate schools become flooded with applications. While graduate school is certainly important and necessary for some fields, more focused certifications and specialized training will get you further along the career path. In the security profession there are several certifications that will leave you prepared for the new challenges. For those considering preparation for Chief Security Officer (CSO) in the future career, consider getting your CPP, CISSP, CFE or other project management certifications. If you have one, consider getting a second as in an competitive environment the highly skilled have the greatest opportunities provided to them.
Fifth, use your new found time to find ways to contribute to your family, church, or community in your skill set area. If I am correct about this economic downturn, we are about to witness a crime wave of great proportions not seen on this planet in decades. What will be a cold winter may thaw into a tremendous warm climate and tsunami of crime if economic misery becomes too great, if unemployment becomes too widespread, indeed if the rule of law is suspended by rational Robin Hoods that value eating more than rule abiding, and then there are those other hoods that just take advantage of the poor, the weak, and crime opportunity wherever it may be found. Your skills as a security professional will be highly sought after the cold season thaws.
So there is my advice. Now on background a little history of how I have come to these conclusions given the experience of the market and my own firm, Sikyur LLC, a security consulting firm that advises Chief Security Officers (CSOs) and their direct reports, other C-level executives and boards of directors.
# # #
Going into 2008 security consulting for Sikyur was excellent and times were good, very good, indeed I turned away work, and I had the luxury of choosing to be picky about what I worked on, and with whom. January, February, and March rolled in like a lion. Indeed, I made my year in the first four months.
However, in late April, I first noticed the economic wheels of the wagon coming off during the 3rd week of April 2008, when due to unexpectedly higher oil prices, one of my customers that runs a nationwide carrier service found that their marginal delivery costs rapidly outpaced their fee structure resulting in unexpected short-term losses -- and you guessed it, management responded quickly to eliminate all non-essential spending (including the remainder 2008-2009 security training and technical assistance) provided by my firm. One client experience while interesting does not make a trend, however it would not be long before another wheel came off the wagon.
In early May 2008, another security systems integration client, from a different industry, found their borrowing and bonding costs had greatly increased and they suspended indefinitely the remainder of the scheduled project starts for 2008 and 2009. There was some hope by management that new projects would be released for Q4 2008, however this public entity failed to raise capital in their tax-free bond financing market in September 2008, causing them to severely pull back on their spending gauge. By October 2008 they were closing all the hatches and preparing for a cold winter with little access to public finance as the bond investors are worried that the municipal authority bonds may default due to decreased housing prices, decreased tax collections, etc.
So what was a mere erosion of economic opportunity in May, turned to Black October where public funding for municipalities was in jeopardy, and clients are now concerned for their own self employment, and they have little time or interest in preserving their contract work in this environment. Now in mid November 2008, the majority of my pipeline projects scheduled for Q4 are frozen, or suspended indefinitely. Several projects that were already approved by line management, still await CFO and board approvals are languishing, and I do not expect these jobs to unfreeze until mid-Winter or Spring. There is still some economic activity, but it pales in comparison to last earlier periods.
So what is my outlook and response -- many years ago I was a young entrepreneur of a rapidly growing company and I was invited to visit the Kauffman Foundation in Kansas City to attend a forum for high-growth companies and entrepreneurs. During the multi-day meeting I had an opportunity to meet with peers and top executives from leading companies that took time to review our business plans and advise us personally. It happened that my two business advisors at the meeting were the Entrepreneurship program director and Foundation Chairman. What I learned has stayed with me to this day. The lesson was this -- every company, business, organization, family, individual -- will experience market cycles, and it is important that you act in good times to preserve capital to give yourself 9-12 months of free cash flow and capital access, so that when truly bad times hit you can ride them out. An example was then given by the Kauffman Executive Director, who was the former CFO of Kauffman Labs. He explained that Kauffman Labs was originally operated with very little debt, owning outright their buildings. Looking at their risk posture, the Kauffman CFO decided that the company needed better protection from downside risk and greater liquidity – so he convinced management to sell their corporate buildings and he leased the buildings back, placing 12-18 months of cash on their books. Sure enough, in a few seasons a recession hit, and damaged their operating market greatly, and because of their strong cash position, they were able to ride the storm out as few recessions last longer than 9-12 months. As fate would have it, a severe economic downturn did occur, they rode out the storm and with their cash they were able to purchase for pennies on the dollar their nearest competitor that was insufficiently capitalized during this period. What was my take away -- cash remains king, credit can contract (by banks at will), but cash and available capital can help you ride out nearly any storm. At the time, I had only 2-months of cash on hand in my operating business and the amount of cash they felt I needed was staggering. They were right, and I moved my ground, reorganized my basket of assets to have access to cash in the bank for time of need.
So today, while the market looks darkest as we are still in the storm, and it may get worse, I have the comfort of knowing that I am prepared and I have ready cash flow and capital to whether 12 months of bad economic cycle. Now I firmly believe that the security systems integration market will come back by the mid- Spring 2009 or early summer as either public spending, regulation, or crime opportunity will encourage reinvestment in security technologies. But for now, it looks like a long cold winter. So I am following my own advice related above, and looking forward to writing a book or two, and using my seasons Ski pass this winter. Cheers.
Thursday, October 30, 2008
Cost cutting and security innovation
The economic downturn experienced by all nations has led to belt-tightening, budget cuts, and suspended capital projects. For the near term, projects in motion will be completed, but projects planned will be suspended pending revision to company forecasts. Within one-year of the market collapse, crime is expected to increase measurably, and so also will the urgency to complete projects that were perhaps shelved due to economic concerns.
Tight money conditions create incredible opportunities for creative destruction of old paradigms of doing business. Look for disruptive technologies to be introduced into the security markets that displace labor, automate processes, and increase transparency of operations. Look for COTS product integration in Software as a Service (SaaS) security service models such as remote video surveillance, remote vehicle fleet tracking, global supply chain monitoring, and virtual dispatch services.
Tight money conditions create incredible opportunities for creative destruction of old paradigms of doing business. Look for disruptive technologies to be introduced into the security markets that displace labor, automate processes, and increase transparency of operations. Look for COTS product integration in Software as a Service (SaaS) security service models such as remote video surveillance, remote vehicle fleet tracking, global supply chain monitoring, and virtual dispatch services.
Monday, October 20, 2008
New blog prepared for monitoring the cresendo of Depression Two (D2) Crimewave
The Sikyurity blog comments on new and emerging trends in security. Escalating crime associated with economic and financial crises has been an early focus. A special blog has been created to track crime developments associated with the 2008 financial crises at http://d2crimewave.blogspot.com/ and discussion on this topic will be enlarged and tracked there.
Tough economy, crime spike expected this holiday season
Tough economy, holiday could bring crime spike, reads the headline. "SALISBURY -- Tough economic times and the holiday season closing in has some law enforcement officials cautioning residents about a possible crime spike and urging them to be more alert. "We're in a very tough economic environment where there are a number of people out of work," said Davis Ruark, Wicomico County state's attorney. "Those factors, coupled with the fact that around the holidays we tend to see an increase in robberies and thefts, I anticipate this will be a difficult year."
Salisbury Mayor Barrie Parsons Tilghman's Crime Task Force has taken measures to prepare for a possible increase in crime. A subcommittee headed by City Councilwoman Debbie Campbell requested a plan of action from the Salisbury Police Department that outlines how it plans to reduce crime activity Nov. 1 through Dec. 31 -- what the subcommittee referred to as "active armed robbery season." "People on the committee related to the issue that we have a spike in crime this time of year and thought this was a really important action step," Campbell said. "People are tired of being victims of crime. I am hopeful that the task force is going to be action-oriented." Economic conditions have caused a shift in crime where some law enforcement agencies are seeing an increase in metal thefts, said Wicomico County Sheriff Mike Lewis.
"We're in for some serious economic hardships," Lewis said. "As a result of that, people will resort to anything to feed themselves and feed their families."
http://www.delmarvanow.com/apps/pbcs.dll/article?AID=/20081012/NEWS01/810120301
Crime Control Recommendation #004
Increase funding for public education on how to become less of a target or victim for crime. Here is a good start to a short-list of things to educate from the article above:
Salisbury Mayor Barrie Parsons Tilghman's Crime Task Force has taken measures to prepare for a possible increase in crime. A subcommittee headed by City Councilwoman Debbie Campbell requested a plan of action from the Salisbury Police Department that outlines how it plans to reduce crime activity Nov. 1 through Dec. 31 -- what the subcommittee referred to as "active armed robbery season." "People on the committee related to the issue that we have a spike in crime this time of year and thought this was a really important action step," Campbell said. "People are tired of being victims of crime. I am hopeful that the task force is going to be action-oriented." Economic conditions have caused a shift in crime where some law enforcement agencies are seeing an increase in metal thefts, said Wicomico County Sheriff Mike Lewis.
"We're in for some serious economic hardships," Lewis said. "As a result of that, people will resort to anything to feed themselves and feed their families."
http://www.delmarvanow.com/apps/pbcs.dll/article?AID=/20081012/NEWS01/810120301
Crime Control Recommendation #004
Increase funding for public education on how to become less of a target or victim for crime. Here is a good start to a short-list of things to educate from the article above:
"Tips to reduce your chances of becoming a victim of crime:
- Don't leave packages in visible places in your car.
- Be aware of your surroundings; know where you are; remember where you parked.
- Park in a well-lit area.
- Shop in groups
- Be aware of strange people and cars on your street and in your neighborhood.
- Report any suspicious vehicles and people to your local law enforcement agency."
SOURCE: Area law enforcement agencies and the State's Attorney's Office
Crime wave starts gradually, then suddenly
There is a tipping point in criminological theory that suggests that orderly conditions can decay gradually, then suddenly if not abatted. A crime wave is in its earliest stages developing, first gradually, noticed here or there, and if conditions do not improve in employment and market confidence, may deteriorate further. Layoffs, unemployment, and lost opportunities hit the poor hardest as they frequently have less savings accumulated to weather financial crises.
Articles in the news point to the return of mean streets. Consider this one published 10/19/08, titled, "Rockaways' 'Wild West': Housing project, 101st Precinct see crime wave,"
http://www.nydailynews.com/ny_local/queens/2008/10/18/2008-10-18_rockaways_wild_west_housing_project_101s.html. "A sharp uptick in robberies and felony assaults at the 1,800-unit Ocean Bay Apartments in Far Rockaway is troubling residents and police. A recent spike in crime in the Rockaways is causing added misery for residents of a local housing complex already plagued by violence. There have been 10 homicides so far this year in the 101st Precinct, up from four during the same period last year, according to new NYPD statistics. Robberies and felony assaults are also up in the precinct, which patrols the Ocean Bay Apartments in Far Rockaway. Beleaguered residents of the nearly 1,800-unit housing project said the area is becoming like the Wild West, with gun violence on a regular basis.
"It's very difficult raising kids in a development where there's shooting every day," said one mother of four who was afraid to give her name. "I feel like giving up on this place. I'm ready to go. It's getting out of hand." Marq Claxton, a retired cop and cofounder of the group 100 Blacks in Law Enforcement Who Care, described the Ocean Bay Apartments as "a fishbowl of violence and apathy." "It's amazing that the front of the projects are at war with the back of the projects," Claxton said of the gang violence."
# # #
Warehousing the poor was never a good solution. Research has shown that congregating the poor and disadvantaged in large groups such as tower-based multi-family housing is a prescription for victimization of the poor; in downturned economic conditions, the victimization can become much worse. The point of my including the article in this blog is not to discuss public housing, but to highlight the dramatic spike in violent crime recently occuring -- up 66% increase in homicide in one year, this coming at a time when police and city budgets are in contraction. If unabated, the cancer of crime violence can be expected to slide down a hill into lawlessness not unlike the wild, wild west.
Articles in the news point to the return of mean streets. Consider this one published 10/19/08, titled, "Rockaways' 'Wild West': Housing project, 101st Precinct see crime wave,"
http://www.nydailynews.com/ny_local/queens/2008/10/18/2008-10-18_rockaways_wild_west_housing_project_101s.html. "A sharp uptick in robberies and felony assaults at the 1,800-unit Ocean Bay Apartments in Far Rockaway is troubling residents and police. A recent spike in crime in the Rockaways is causing added misery for residents of a local housing complex already plagued by violence. There have been 10 homicides so far this year in the 101st Precinct, up from four during the same period last year, according to new NYPD statistics. Robberies and felony assaults are also up in the precinct, which patrols the Ocean Bay Apartments in Far Rockaway. Beleaguered residents of the nearly 1,800-unit housing project said the area is becoming like the Wild West, with gun violence on a regular basis.
"It's very difficult raising kids in a development where there's shooting every day," said one mother of four who was afraid to give her name. "I feel like giving up on this place. I'm ready to go. It's getting out of hand." Marq Claxton, a retired cop and cofounder of the group 100 Blacks in Law Enforcement Who Care, described the Ocean Bay Apartments as "a fishbowl of violence and apathy." "It's amazing that the front of the projects are at war with the back of the projects," Claxton said of the gang violence."
# # #
Warehousing the poor was never a good solution. Research has shown that congregating the poor and disadvantaged in large groups such as tower-based multi-family housing is a prescription for victimization of the poor; in downturned economic conditions, the victimization can become much worse. The point of my including the article in this blog is not to discuss public housing, but to highlight the dramatic spike in violent crime recently occuring -- up 66% increase in homicide in one year, this coming at a time when police and city budgets are in contraction. If unabated, the cancer of crime violence can be expected to slide down a hill into lawlessness not unlike the wild, wild west.
Wednesday, October 15, 2008
D2 Crime Wave Watch
10/15/08. These are extraordinary times as we witness the collapse of the US stock markets, the demand destruction caused by lost confidence, fear, and credit tightening, and consequent belt tightening by individuals, businesses, and local governments that will have the unintended consequence of serving as a catalyst for a downward spiraling economy. Recession is assured, and Depression 2 is not unlikely.
So what to do? After you have moved to safeguard your financial resources and preserve capital, we would do well to consider the consequence of later dominoes to fall in the progression of this crises. Today governments speak of stabilizing banks, on a near and future day, the discussion will be about maintaining the rule of law. With history as our guide, we are likely to experience a spiking crime wave as the economic misery index worsens. Wise leaders should prepare for the coming crime of great proportions not seen on this planet in 100 years.
Now, this blog is not published to scare, but to forewarn, so that individuals, families, communities, businesses, governments, can protect themselves from the coming crime wave. There is a sage biblical verse that reads, 'if you are prepared, you shall not fear.' We are indeed experiencing a 100-year economic storm, and we are only at the beginning. With the stair-step-drops marking the collapse of financial markets, and deep recession upon us, we may soon enter a phase approximating the Great Depression. Marking semantic differences of recession and depression are frequently meaningless, and have a greater bearing to ones relative position to the proximate pain of the recession -- leading President Ronald Reagan to quip, "in a recession your neighbor is out of work, in a depression, you are out of work," as it becomes very personal. In the 1930s, a great crime wave ensued with the economic misery. We may well experience a resurgence of Great Depression level crime wave.
From the published "History of the FBI, The New Deal: 1933 - Late 1930's" we read that "The 1929 stock market crash and the Great Depression brought hard times to America. Hard times, in turn, created more criminals--and also led Americans to escape their troubles through newspapers, radio, and movies. To combat the crime wave, President Franklin D. Roosevelt influenced Congress in his first administration to expand federal jurisdiction, and his Attorney General, Homer Cummings, fought an unrelenting campaign against rampant crime. One case highlighting the rampant crime included the swindling and murder of members of the Osage Indian tribe in Oklahoma for the rights to their oil fields. Noting the widespread interest of the media in this war against crime, Hoover carried the message of FBI work through them to the American people." http://www.fbi.gov/libref/historic/history/newdeal.htm
The Home Office of the British Government released, or inadvertently released, a draft document in early September 2008 focusing on the potential crime wave that could ensue if the recession deepens to depression. From September 3, 2008, and the headline, "Credit crunch could lead to crime wave, Home Office warns Downing Street: The economic downturn is set to lead to more crime, fewer police, more illegal immigration and a rise in far right extremism, a leaked Home Office letter reveals. " The author writes -- "A blunt assessment of the pressures that a recession will bring on law and order is detailed in a document which is to be sent to Number 10 from Jacqui Smith, the Home Secretary. It outlines the potential rises in crime, including violent crime, that could occur because of the credit crisis. Overall crime is expected to rise as a result of the more difficult economic times, which could also fuel terrorism, it warns. The document also claims there will be an increase in "hostility" towards migrants as people question the financial assistance newcomers are given by the state." "Having studied previous recessions and downturns and its effect on crime and policing, the Home Office's modelling indicates that "an economic downturn would place significant upward pressure on acquisitive crime and therefore overall crime figures," according to the leaked letter. It points to the 1992 recession which saw sharp rises in violent crime of 19 per cent. "#http://www.telegraph.co.uk/news/newstopics/politics/lawandorder/2657335/Credit-crunch-could-lead-to-crime-wave-Home-Office-warns-Downing-Street.html
With budgets tightening for local governments, the already low ratios of officers per population may become over stretched. In general terms, public safety officers per 1,000 population are far too small to be of any real impact during a crime wave that creates moral hazard for hungry, stressed, financially broke individuals that resort to base survival ignoring civil rules of good behavior, and acting civilly disobedient, or worse. With increased moral hazard, and weakening of commitment to obey the rule of law, crime waves can increase rapidly, and virally with contagion.
This blog will be used to track the progressing crime wave development, and forecast the tipping point with an aim of providing preparations and plans to safeguard individuals, families, communities, businesses, and governments.
Idea #001 -- Create a Crime Control strategy and plan to curb and combat the coming crime wave.
Just as Chairman Bernake has schooled himself on the economics of the Great Depression, and has moved rather dramatically to fund banks to forestall bank collapse. Our next US president should also seek to proactively preempt the rise and speed of the coming crime wave by reducing crime opportunity. A package of coordinated measures should be prepared much like the financial plan envisioned by the Federal Reserve.
Ideal #002 -- Create and fund a Crime Prevention Through Environmental Design (CPTED) and situational crime prevention educational initiative for cities and communities to help them prepare for the coming crime wave. This will serve both to create employment opportunities, but also to help communities and individuals protect themselves through the built environment, as there wont be sufficient police to respond to their specific needs do to potentially overwhelming calls for police assistance demand.
Develop and teach measures of CPTED to: increase surveillance, access control, territoriality, image and maintenance, and locational or place setting requirements for crime prevention.
Develop and teach Situational Crime Prevention techniques for specific places that:
(1) increase the risks for offenders committing crime
(2) increase the effort required for offenders to commit crime
(3) reduce the rewards for crime
(4) remove excuses for committing crimes, and introduce cultural inculcation, shaming, and other reinforcements to encourage support of the rule of law
Idea #003 -- Do more with less. Figure out what law enforcement is doing that is ineffective and stop doing it. First issue up -- consider decriminalizing Marijuana, as a means of reducing rewards for crime, and redistributing scarce law enforcement resources to greater crime problems
In terms of crime control, the era of Prohibition from 1920 to 1933 created great criminal opportunity for mobs and organized crime. In hindsight, it was necessary to decriminalize distribution of alcohol to remove the demand for bootleg liquor and deny criminal organizations of product sales and revenue.
In like kind, as the market collapse continues and the expected D2 Crime Wave develops, it is not unthinkable that criminal organizations involved in legitimate enterprise may look to resume some illegal operations to recapture revenue. Alcohol is legal and not a great threat. However, there may be a resurgence of illegal drug distribution at the street-level in the US in coming months and years. As radical as it may seem to me (as a long-term drug control policy advocate and former ONDCP employee), it may be advisable in the near future for the next President to decriminalize marijuana in the US, to reduce the market incentive of organized crime, and to reduce law enforcement resources required on marijuana eradication in order to re-direct the limited resources to cocaine, meth, and harder drugs that are known to be greater influences in terms of exacerbating criminal behavior. This obviously would have moral hazard, insurance, and liability impacts for marijuana use in the workplace, and potentially signal greater use by youth, but this could be controlled and managed similar to youth alcohol policy controls.
The greater issue however is to denying criminal market activity of the less baneful marijuana, and focusing attention on greater crime problems. Such radical policy thinking seems to me to be quite rational to combat the coming crime wave.
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This is the first post, and there will be others. I welcome the constructive thought, opinion, and contribution to this dialog that may serve as a benefit for individuals, families, communities, businesses, and governments seeking to create safe havens, and positive environments for living through the coming crime wave.
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